U.S. government moves to electronic transactions

(IDG) -- The U.S. Department of the Treasury on Tuesday announced two electronic-transaction initiatives that put the Internet to greater use in the collection of and disbursement of payments.

One of the initiatives, Pay.gov, managed by the FMS (Financial Management Service), will be launched in October at www.pay.gov, Treasury officials said at a news conference. Federal agencies will be able to link their own Web sites to Pay.gov, which will be supported by technology that will enable users to make payments to the government, including taxes, fees, licenses, and leases by credit card, electronic transfer or a number of other electronic methods.

FMS is the world's largest collection system as the recipient of more than $2 trillion in federal revenue. Most of those disbursements and collections already take place using some form of electronic transaction. FMS also disburses more than $1.2 trillion annually in Social Security, veterans benefits, tax refunds, and other payments.

Currently, people who have to pay the government a fee or a tax are able to go to the Web site of the agency they owe and download the forms they need, but they're not able to complete the payment transaction.

"We leveraged our relationship with private banks and reached out to Internet service providers to create a low-cost Web site that will enable users to register once and subsequently transact with the government," said Stuart Eizenstat, deputy secretary of the Treasury.

Pay.gov will be available for just about any payment, from a camping license fee to businesses that lease government buildings, and it will use a variety of payment and collection technologies that FMS has been testing over several years, said Gary Grippo, FMS director of e-commerce. Credit card payments and debit payments will be initially available. Eventually, people will be able to use digital cash, electronic checks, and the technology used by automatic teller machines.

Security was one of the top concerns FMS had in the development of Pay.gov, Grippo said. The system uses digital signature, digital certificate, and authentication technologies, as well as firewalls to protect the information that moves across the network. The security that will be used will exceed best practices in the industry, he said.

Initially, five government agencies will link to Pay.gov, but by the middle of next year, most non-defense federal agencies are expected to be using the system, Grippo said.

The second initiative announced by the Treasury Department Tuesday is called SLGSafe, and is supported by the Bureau of Public Debt. It is an e-commerce Internet service for people and institutions that invest hundreds of millions of dollars annually in state and local government (SLG) securities.

About 400 banks across the country hold SLG securities. Currently, 10 of those use SLGSafe, and 21 others are in the process of obtaining access to the system. The bureau plans to convert all 400 banks to SLGSafe over the next three years, said Cindy Springer, assistant commissioner for information technology and public debt.

SLGSafe users access the Internet portion of the bureau's Special Purpose Securities System (SPSS) through a browser, giving them real-time access to SPSS's database containing the state and local government securities data. The bureau issues users a digital certificate and an authorization code.

The site ultimately will allow all state and local government customers and their financial institutions to manage their accounts over the Internet, Eizenstat said.